Following a three-year investigation, the European Commission (EC) has ruled that Apple must pay 13bn euros to Ireland in back taxes.
The EC decided that the tax arrangements in place between Ireland and the world’s most valuable company were illegal. As a result of the ‘selective treatment’ that Apple received with regards to tax, it must now repay £11bn to Ireland.
The arrangements saw Apple effectively only paying a corporate tax of 1 per cent, instead of the 12.5 per cent rate that others must pay in Ireland. According to the EC, Apple only paid 1 per cent in 2003, and in 2014, only paid approximately 0.005 per cent.
“This decision sends a clear message,” Commissioner Margrethe Vestager said, following the ruling. “Member states cannot give unfair tax benefits to selected companies, no matter if they are European or foreign, large or small, part of a group or not. This is not a penalty; this is unpaid taxes to be paid.
“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” she continued.
The EC’s ruling was vehemently denied by both Apple, and the Irish government. In response to the ruling, the company said: “The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” the company said in a statement.
“The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe.
“Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned.”